Amazon.com is striking a deal with independent music-licensing startup TuneCore to offer artists CD-pressing on demand.
TuneCore is probably best known for being tapped by Nine Inch Nails to distribute digital copies of their double-album "Ghosts" on Amazon's MP3 store. Beginning June 1, Amazon is expanding the pact to include …

COMMENTS

Interesting

Actually not a bad deal...

I'm pretty sure a traditional record label + the retail store takes a lot more than 60%, supposedly the band is lucky to see $1 from an $18 CD sale. Since Amazon is performing as both the manufacturer and retailer they're just taking 30% for each of these services.

Interesting but ...

It's an interesting idea (and anything that frees music and artists from the parasitic music industry is good news as far as I'm concerened). However, I'd rather see a higher payment to Amazon up front and a then greater % of the sales going to the artists.

I think Amazon could have scored a real advantage with the public if they broke that 50/50 barrier and gave the artist more than they took for themselves. It galls a many people to know that the actual creators of the music get less than those who just profit off its distribution.

Who 'owns' the music?

From reading the article, it's not stated, but I assume that the artist retains IP rights (call it what you will) over the material they get Amazon/TuneCore to distribute for them in this way. If so, this is a much better deal that the major labels would offer them but only on that aspect of the business.

Amazon/TuneCore are acting as a distributing and marketing contractor and only that, which is fine, but they do not (can not?) act as publisher, rights protector, legal advisor, concert organiser, promoter, etc etc.

I'm not saying that the major labels do a wonderful job for most artists in those other areas of the business, but it is a service they provide as part of the signing up deal. For a new artist, the Amazon/TuneCore way is a low cost entry point that is easy to try and it doesn't hurt too much if you fail. If an artist succeeds on this route then hopefully the independent labels will offer them a good deal.

It's just a start

Think what it can mean in the future. Amazon can automatically promote those artists. Imagine them creating embedded player like last.fm or Pandora to promote all those unlisted artists. Every time you search you can listen to music, you can have "Recommended artists" with instant preview, etc. All needed would be for the artist to check a checkbox "I agree for Amazon to promote my music". It will take a while to build up a collection big enough, but it's just a matter of time.

Another thing: although artist gets only 40% they still retain the rights to their music. Tell this about RIAA. Not bad, I'd say, especially when artist wants to move to competing service.

i assume you don't mean pressing

Artists still getting screwed

Just not as deeply. Be interesting to hear a justification for the 60% trousering by Amazon. If they upped the percentages to the artist they could conceivably get a few of the bigger names. Hurt the RIAssA big time.

Actually not a bad deal

Bookshops typically take a cut of somewhere between 30% and 40% on stock delivered to their door so another 20% to 30% for physical production and distribution isn't exactly extortionate. And it frees the band from the gip of the labels to boot.

Pressing?

The use of the word "pressing" here is misleading. It implies that these disks will be made using the same process as a CD you could buy in the shops. Just producing the glass master for this process costs four or five times the quoted $31. Unless Amazon has suddenly become a charity for supporting indie musicians, these disks will just be burned to CDR, before being nicely printed so as to look as close to the real thing as possible.

Ahem!

"The offer is presumably designed to compliment TuneCore's digital distribution service"

No doubt. But will it complement it?

By the way, @AC, "Interesting but ... " - Amazon is paying for the physical production and distribution of the disc out of their cut, while the artist's portion is pure profit. They do of course need to pay off their own costs to create and record the disc, but that's a fixed amount however many are sold. So it's not really as simple as saying 50/50.

So does this mean...

Maths problem

I think there's a problem with the maths in the article. If the artist gets to keep 40% of the sale price, the hypothetical $9 cd nets the artist approximately $3.60 per disc. If they owe $31.00 for the same, hypothetical disc to be distributed, it's 9 cds that would be the break even point, not 4, unless Amazon is paying a portion of the $31 that is due - which I doubt.

Production Costs

What a lot of the comments here are ignoring, with all their 'better than a record deal' rhetoric, is that the artist is now also bearing all the expenses (from rehearsal to recording to promotion and marketing).

As with the Kindle and newspaper story, it seems to me that far from cutting out the middle-man, we've simply replaced many competing middle-men with few (Amazon, Google, Apple) who are using their weight to gain deals Walmart could only dream of, while not offering anything other than access to the marketplace.

Take a step back and ask what Amazon are actually providing for that 60% - an entry in their stock database and a credit-card payment system. Amazon's risk? About 0%. That doesn't seem to justify 60% of the revenue for me.

The whole essence of why a record label can get an artist to sign up to a deal where they see 10% of revenue, is that the label offers to take most of the risk, in return for most of the reward. It's not actually a lot different to selling 90% of your firm to investors (then complaining when they take all the profits or sell you down the river).